Why Occupational Licensing Hurts Alaskans

By Tim Barto and Quinn Townsend

A strong, long-term economy for Alaska must include a flourishing private sector. Freedom in the market sparks innovation, encourages the development of new businesses, and creates jobs. Governmental meddling does the opposite, and one way the government meddles is through occupational licensing – requiring a person to test, apply for, and pay for a license that allows them the privilege of starting a business or getting a job. The result is government regulation that hurts businesses and hard-working Alaskans.  

Occupational licensing creates barriers for people who want to start a business or get into certain occupations, all of which are the exact opposite of what our state needs. Occupational licensing also results in higher costs of goods and services, and those higher costs disproportionately hurt people in lower-income brackets.  

Another unfortunate outcome of occupational licensing is the wall it creates to protect those who are already licensed. Because licensed business owners had to go through lengthy applications, pass required tests, and pay expensive fees to obtain their licenses, they often become protective of those licenses and see them as ways to prevent competition. Those government-mandated and issued licenses have thus created a type of monopoly.  

It is time to reduce government’s stranglehold on free enterprise by removing expensive and restrictive licensing laws that are not warranted based on health and safety concerns. There are a variety of ways to address occupational licensing, some already implemented by the state, that would reduce the barriers-to-entry, starting with the “lowest hanging fruit”: 

  1. Regularly reevaluate all licensing laws in the state. 
  2. Waive initial fees to become licensed. 
  3. Create a “sunrise” provision that requires advocates of new licensing proposals to prove that the license is necessary. 
  4. Allow paid apprenticeships in lieu of classroom training.
  5. Replace mandatory licensing with registration or voluntary certification.
  6. Implement universal recognition, which recognizes out-of-state licenses in good standing and which has been implemented in at least 10 other states.   

Alaskans deserve the opportunity to work and reducing unwarranted licensing laws will open employment doors to many in the state. For a prosperous private sector and a strong economy that needs to see recovery after the COVID-19 pandemic, lawmakers should allow Alaskans to get back to work. Reducing barriers to entry for Alaskans is the right move.